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HomeMy WebLinkAbout1996-276J \WPDOCS\ORD\RMIAMEND ORD ORDINANCE NO. qtQ -all AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL ("RMI"); AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the City Manager is hereby authorized to execute the first amendment to the professional services agreement with Resource Management International ("RMI"), a copy of which is attached hereto and incorporated herein, along with any task orders and other documents necessary to the performance of the first amendment. SECTION II. That the expenditure of funds as provided in the attached agreement is hereby authorized. SECTION III. That this ordinance shall become effective immediately upon its passage and approval. � PASSED AND APPROVED this the � day of 1^.- 1996 JAC MILLER, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM. HERBERT L PROUTY, CITY ATTORNEY BY. STATE OF TEXAS § COUNTY OF DENTON § FIRST AMENDMENT TO PROFESSIONAL SERVICES This first amendment to the Professional Services Agreement entered into on the 17th day of September, 1996 by and between Resource Management International, Inc , a California corporation ("RMI") and the City of Denton, Texas, a Texas municipal corporation with its principal offices at 215 East McKinney, Denton, Texas ("City") for professional and related services provided to the city, hereinafter referred to as "Base Agreement " In consideration for the terms and conditions set forth herein, the parties hereby agree I That Section I "Scope of Services" of the Base Agreement is hereby amended to read as follows RMI shall provide to the City the services set forth in individual task orders made as attachments to this Agreement including without limitation, Task Orders No 96A and 96B II That Section II "Fees for Services" of the Base Agreement is hereby amended to read as follows For services provided by RMI to City pursuant to this Agreement, the City shall pay RMI in accordance with the rates and charges set forth in Exhibit A "Fees for Services," attached hereto and made a part of this Agreement for all purposes provided, however, such charges and rates shall not exceed $80,000 unless the City agrees by an amendment to this Agreement to increase the maximum fee for services III That save and except as amended hereby, all the terms, conditions, clauses, and sentences of the Base Agreement shall remain in full force and effect The signatories hereto represent that they are authorized to enter into this Agreement on behalf of the party for whom they sign CITY OF DENTON, TEXAS RESOURCE MANAGEMENT INT , INC By By Ia a-k%k MGV--OL! . It APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY PAGE 2 Date December 3, 1996 CITY COUNCIL AGENDA ITEM TO- MAYOR AND MEMBERS OF THE CITY COUNCIL FROM. Ted Benevides, City Manager SUBJECT: POWER SUPPLY OPTION STUDY RECOMMENDATION: The Electric Utility staff and the Public Utility Board recommends that the City Manager be authorized to hire RMI to develop, issue and coordinate analysis of an RFP for power supply options for Denton SUMMARY: Denton is forecast to require additional electric generating capacity in the near future In addition, the power supply market is changing rapidly as a result of market deregulation In order to make strategic decisions regarding the future of power production and purchase by the electric utility, the options available must be defined In this rapidly changing market, the only way to define the options that are available is to allow the competitive market place to respond to an RFP The attached task order defines an RFP process that will encourage consideration of all available options The initial task of this effort will consist of a review of the existing load forecast, development of the RFP, issuance of the RFP, and initial screening of all proposals received The final task in this process will be an in depth analysis and negotiation of the finalist proposals RMI was selected to perform this task because of their familiarity with Denton's existing resource situation, the data base and production cost model development of the Denton system they have already completed, and their experience in performing this type of activity for other public utilities FISCAL IMPACT: The cost of the initial task for this power supply option study is $55,000 A budget for the in depth review of finalist proposals will be developed upon completion of the initial task Respectfully submitted, R E Nelson Executive Director Utilities Prepared by Sharon Mays Director of Electric Utilities ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Services provided under this Task Order will assist the City of Denton (City) in evaluating the city's options for power supply Resource Management International, Inc (RMI) will assist in 1) development of the Request for Proposals (RFP) document, 2) facilitating the RFP and communicating the City's desire to consider a broad range of power supply options, and, 3) evaluation of proposals The work activity identified in this Task Order will include a detailed review and ranking of a select number of proposals The work activity of RMI will include facilitating responses to the City's Request For Proposals that will include a broad -based consideration of supply options The intent will be to encourage both traditional and innovative solutions to reducing the City's power costs RMI will maintain contact with the proposers and encourage through discussions creative approaches that consider not only Dentori s incremental power needs, but also potential options to lower the City's overall power costs through alternative uses of existing generation RMI will maintain a high degree of on -going communication with utility staff during the evaluation process RMI will conclude the work activity in the Task Order with a recommendation of the best option/options for the City to consider for further negotiations Task A Review of Load Forecast RMI will review the City's Load Forecast and make recommendations where appropriate • A data request will be prepared requesting supporting data for the forecast (It is assumed the City will be able to provide most of that information on disk) • Variables will be examined for outliers and consistency between historic and forecasted data points • The models and the statistics for those models will be reviewed • Staff will be interviewed through a conference call to discuss procedures used in developing historic and forecasted independent variables A letter report will be written to present findings and to make recommendations regarding the use of the forecast for planning purposes Task B Review of Request For Proposal RMI will work with the City in preparing the RFP for power supply to the City RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power requirements of the City The RFP should be structured to allow such consideration while maintaining sufficient definition and parameters to allow a comparative evaluation of the submittals Alternatives which may be considered include - traditional blocks of purchased power - economy energy purchases - lease arrangements - entering into operating agreement to run city generation - support of cogeneration projects - repowering of existing City units - pooling arrangements - partnering with customers on generation projects - new customer alliances including demand -side management initiatives - full requirements supply incorporating credit for existing City resources - others as proposed • The RFP will be comprehensive It will include sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental in providing the information to RMI Discussions with staff throughout development of RFP will be held to evaluate handling of confidential information • Respondents will be encouraged to make innovative use of the City's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs • A comprehensive description of the City's existing resources and future projected power requirements will be provided to allow proposers effective consideration of the range of potential supply arrangements • The format of proposal responses will be structured to allow for effective comparison of proposals 2 Task C RFP Process The RFP will be issued by RMI to a wide group of public power and investor -owned utilities, river authorities, power marketers and power developers Included in RMI's work activity will be • Identification of entities to be included on mailing list for RFP • Preparation of advertisement language and identification of publications to inform the public of the City's RFP • Distribution of the RFPs to mailing list and in response to requests from advertisements • Planning for and directing a pre -proposal meeting to allow for better understanding of City's requirements and existing resources, pre -proposal meeting activity might include tour of City's Spencer Power Plant • Responding to proposers' questions regarding RFP Task D Evaluation of Proposals RMI will prepare a multi -step review of proposals Proposal review activities will be conducted to focus the majority of review effort on most desirable proposals Following receipt of proposals, each proposal will be reviewed and clarification of proposal language requested before comparative review is initiated The evaluation will utilize a total system approach which judges the benefits of the proposal considering the City's involvement in TMPA and TMPP The following activities will be completed Phase I - Initial Screening RMI's initial review will include a screening to identify the most advantageous proposals The screening criteria will include - economic terms of power supply options - financial strength of proposers - experience with power supply in ERCOT - Consideration of whether proposal is feasible within given timeframe and other constraints Results of initial review will be summarized and reviewed with City staff to establish proposers to receive more in-depth review Phase II - In-depth Review In-depth review will include - discussion of proposal with proposer to assure proper understanding of proposal terms - evaluation of economic terms over period of proposed supply period to include estimate of net present value of power supply option(s) - coordination of cost and responsibility for ancillary services and transmission associated with delivery of power supply - identification and valuation of proposers' commitment to reduce City's responsibility to assume cost variation risks - PROSYM computer modeling to be used to dispatch resources into City's resource mix as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RMI will prepare a report summarizing findings and presenting recommendations to staff and to the Utility Board Results of in-depth proposal reviews will be summarized and presented to City staff A meeting will be held to discuss results of proposal review and answer City staff questions A final report will be prepared to present the results and recommendations from the RFP evaluation process Another meeting will be held with the Utility Board to present the results of the evaluation and recommendations 4 Development of an accurate project budget to complete these Tasks is difficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Preliminary budget projections are offered for portions of the work A budget of $55,000 is suggested for Tasks A through C, Phase I of Task D, and Task E The budget to complete in-depth proposal reviews will be very dependent upon the number of proposals reviewed and the complexity of the proposal evaluation (Expenses for detailed proposal reviews may be supported partially or fully by the proposers ) The work effort to prepare the in- depth review activities outlined in Phase R of Task D are projected to range from $7,000 to $10,000 per proposal These estimates do not include engineering feasibility analysis of projects A budget to complete the detailed proposal reviews in Phase II of Task D will be established following identification of what proposals will be included in this review This budget as established maybe evaluated at anytime by RMI or the City RMI will bill monthly and will not exceed the authorized budget without approval from the City Tlus Task Order is authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted by City of Denton, Texas Re; By By Bob Nelson, Executive Director Management International, Inc Dated //'&A/ D�d Iv(�J �p 1 1 liP By Sharon Mays, Elect is Director Dated By Ted Benavides, City Manager Dated ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Services provided under this Task Order will assist the City of Denton (City) in evaluating the city's options for power supply Resource Management International, Inc (RMI) will assist in 1) development of the Request for Proposals (RFP) document, 2) facilitating the RFP and communicating the City's desire to consider a broad range of power supply options, and, 3) evaluation of proposals The work activity identified in this Task Order will include a detailed review and ranking of a select number of proposals The work activity of RMI will include facilitating responses to the City's Request For Proposals that will include a broad -based consideration of supply options The intent will be to encourage both traditional and innovative solutions to reducing the City's power costs RMI will maintain contact with the proposers and encourage through discussions creative approaches that consider not only Dentori s incremental power needs, but also potential options to lower the City's overall power costs through alternative uses of existing generation RMI will maintain a high degree of on -going communication with utility staff during the evaluation process RMI will conclude the work activity in the Task Order with a recommendation of the best option/options for the City to consider for further negotiations Task A Review of Load Forecast RMI will review the City's Load Forecast and make recommendations where appropriate • A data request will be prepared requesting supporting data for the forecast (It is assumed the City will be able to provide most of that information on disk) • Variables will be examined for outliers and consistency between historic and forecasted data points • The models and the statistics for those models will be reviewed • Staff will be interviewed through a conference call to discuss procedures used in developing historic and forecasted independent variables A letter report will be written to present findings and to make recommendations regarding the use of the forecast for planning purposes Task B Review of Request For Proposal RMI will work with the City in preparing the RFP for power supply to the City RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power requirements of the City The RFP should be structured to allow such consideration while maintaining sufficient definition and parameters to allow a comparative evaluation of the submittals Alternatives which may be considered include - traditional blocks of purchased power - economy energy purchases - lease arrangements - entering into operating agreement to run city generation - support of cogeneration projects - repowering of existing City units - pooling arrangements - partnering with customers on generation projects - new customer alliances including demand -side management initiatives - full requirements supply incorporating credit for existing City resources - others as proposed • The RFP will be comprehensive It will include sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental in providing the information to RMI Discussions with staff throughout development of RFP will be held to evaluate handling of confidential information • Respondents will be encouraged to make innovative use of the City's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs • A comprehensive description of the City's existing resources and future projected power requirements will be provided to allow proposers effective consideration of the range of potential supply arrangements • The format of proposal responses will be structured to allow for effective comparison of proposals 2 Task C RFP Process The RFP will be issued by RMI to a wide group of public power and investor -owned utilities, river authorities, power marketers and power developers Included in RMI's work activity will be • Identification of entities to be included on mailing list for RFP • Preparation of advertisement language and identification of publications to inform the public of the City's RFP • Distribution of the RFPs to marling list and in response to requests from advertisements • Planning for and directing a pre -proposal meeting to allow for better understanding of City's requirements and existing resources, pre -proposal meeting activity might include tour of City's Spencer Power Plant • Responding to proposers' questions regarding RFP Task D Evaluation of Proposals RMI will prepare a multi -step review of proposals Proposal review activities will be conducted to focus the majority of review effort on most desirable proposals Following receipt of proposals, each proposal will be reviewed and clarification of proposal language requested before comparative review is initiated The evaluation will utilize a total system approach which judges the benefits of the proposal considering the City's involvement in TMPA and TMPP The following activities will be completed Phase I - Initial Screening RMI's initial review will include a screening to identify the most advantageous proposals The screening criteria will include - economic terms of power supply options - financial strength of proposers - experience with power supply in ERCOT - Consideration of whether proposal is feasible within given timeframe and other constraints Results of initial review will be summarized and reviewed with City staff to establish proposers to receive more in-depth review Phase II - In-depth Review In-depth review will include - discussion of proposal with proposer to assure proper understanding of proposal terms - evaluation of economic terms over period of proposed supply period to include estimate of net present value of power supply option(s) - coordination of cost and responsibility for ancillary services and transmission associated with delivery of power supply - identification and valuation of proposers' commitment to reduce City's responsibility to assume cost variation risks - PROSYM computer modeling to be used to dispatch resources into City's resource mix as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RMI will prepare a report summarizing findings and presenting recommendations to staff and to the Utility Board Results of in-depth proposal reviews will be summarized and presented to City staff A meeting will be held to discuss results of proposal review and answer City staff questions A final report will be prepared to present the results and recommendations from the RFP evaluation process Another meeting will be held with the Utility Board to present the results of the evaluation and recommendations 4 Development of an accurate project budget to complete these Tasks is difficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Preliminary budget projections are offered for portions of the work A budget of $55,000 is suggested for Tasks A through C, Phase I of Task D, and Task E The budget to complete in-depth proposal reviews will be very dependent upon the number of proposals reviewed and the complexity of the proposal evaluation (Expenses for detailed proposal reviews may be supported partially or fully by the proposers ) The work effort to prepare the m- depth review activities outlined in Phase II of Task D are projected to range from $7,000 to $10,000 per proposal These estimates do not include engineering feasibility analysis of projects A budget to complete the detailed proposal reviews in Phase II of Task D will be established following identification of what proposals will be included in this review This budget as established maybe evaluated at anytime by RMI or the City RMI will bill monthly and will not exceed the authorized budget without approval from the City This Task Order is authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by City of Denton, Texas By o Bob Nelson, Executive Director Dated Accepted by Resource Management International, Inc By Dated B i, y. Sharon Mays, Electric Director Dated. By: Ted Benavides, City Manager Dated.